The Changing Face of Business

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The Changing Face of Business
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Chapter
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Learning Goals
Distinguish between business and not-for-profit
organizations. Identify and describe the factors
of production. Describe the private enterprise
system, including basic rights and
entrepreneurship. Identify the six eras of
business, and explain how the relationship
eraincluding alliances, technology, and
environmental concernsinfluences contemporary
business.
Explain how todays business workforce and the
nature of work itself is changing. Identify the
skills and attributes managers need to lead
businesses in the 21st century. Outline the
characteristics that make a company admired by
the business community.
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What is Business?

• Profit-seeking activities and enterprises provide
  goods and services necessary to an economic
  system.
• Profit-seeking is the reward for business people
  who take the risk involved to offer goods and
  services to customers.
• See Fortune 500 for a list of major U.S.
  companies.

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Factors of Production

• Natural Resources
• Capital
• Human Resources
• Entrepreneurship
• Occupational Outlook Handbook

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The Private Enterprise System

• Capitalism
• Adam Smith is the father of capitalism.
• Invisible Hand
• Economic system determines business ownership,
  profits, and resources
• Rewards firms for their ability to serve the
  needs of consumers
• Minimized government intervention
• Competition is the battle among businesses for
  consumer acceptance.

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Basic Rights in a Private Enterprise System
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Entrepreneurship

• An Entrepreneur
• Is a risk-taker
• Takes financial, personal, social, and career
  risks
• Sees a potentially profitable opportunity
• Devises a plan to achieve success in the
  marketplace and earn those profits
• Fuels the U.S. economy
• Provides innovation

Entrepreneurial thinking is important within
large firms.
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Six Eras in the History of U.S. Business
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Managing Relationships through Connections

• Relationship Management
• Activities to build and maintain mutually
  beneficial ties with customers and other parties
• Relationship management depends on technology.

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Strategic Alliances and Partnerships

• A partnership is an affiliation of two or more
  companies that help each other achieve common
  goals.
• A strategic alliance is a partnership formed to
  create a competitive advantage for both parties
  (see Amazon).

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Todays Business Workforce

• Dedicated workers who can foster strong ties with
  customers
• Capable of high-quality production
• Able to compete in global markets
• Technically savvy

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Changes in the Workforce Aging Population

• By 2030, the number of U.S. workers 65 or older
  will reach 72 million.
• Many baby boomers are hitting the peak of their
  careers, while Generations X and Y are launching
  their careers.
• Technology has intensified the hiring challenge
  by requiring workers to have ever more advanced
  skills.
• U.S. Census Bureau

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Changes in the Workforce Shrinking Labor
Pool/Diversity

• Economists predict the U.S. labor pool could soon
  fall short by as many as 10 million people.
• The two fastest-growing ethnic populations in the
  United States are Hispanics and people of Asian
  origin.
• Employee teams with individuals of different
  genders, ethnic backgrounds, cultures, religions,
  ages, and physical and mental abilities are more
  effective.

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Changes in the Workforce Outsourcing

• Outsourcing is using outside vendors to produce
  goods or fulfill services and functions that were
  previously handled in-house or in-country.
• Offshoring is the relocation of business
  processes to lower-cost locations overseas.

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Changes in the Workforce Innovation through
Collaboration

• Younger workers are looking to something other
  than work-comes-first
• Telecommuting and job-sharing
• Part-time and temporary workers are growing
• Collaboration is replacing working alone
• Value risk-taking and innovation

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The 21st-Century Manager

• Critical-thinking
• Creativity
• Ability to lead change
• Vision

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Critical Thinking and Creativity

• Critical thinking is the ability to analyze and
  assess information to pinpoint problems or
  opportunities.
• Creativity is the capacity to develop novel
  solutions to perceived organizational problems.

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Ability to Lead Change

• Guide employees and organizations through changes
• Managers must be comfortable with tough
  decisions.
• Factors that require organizational change can
  come from external and internal sources.

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What Makes a Company Admired?

• Solid profits
• Stable growth
• Safe and challenging work environment
• High-quality goods and services
• Business ethics and social responsibility
• Fortunes list of Most Admired Companies

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The Future of Business

• New Technologies
• Population Shifts
• Emerging nations
• Shrinking Global Barriers
• Trade, communication, transportation